ASEAN+3 enhances financial cooperation

Finance ministers and central banks’ governors of ASEAN Member States and China, the Republic of Korea (RoK) and Japan (ASEAN+3) have agreed to intensify regional financial cooperation.

The consensus was reached at the 26th ASEAN+3 Finance Ministers’ and Central Bank Governors Meeting held in Incheon, the RoK on May 2.

Speaking at a press conference in Jakarta on May 3, Indonesian Minister of Finance Sri Mulyani Indrawati, who co-chaired the meeting, said that strengthening regional financial cooperation is implemented through the initiatives under the Regional Financing Arrangements (RFA) Future Direction, Chiang Mai Initiative Multilateralisation (CMIM), ASEAN+3 Macroeconomic Research Office (AMRO), and Asian Bond Markets Initiative (ABMI).

The parties also agreed to boost financial collaboration through the ASEAN+3 Future Initiatives which comprise of infrastructure financing, study on non-lending facility, disaster risk financing (DRF), harnessing digital advancement (FinTech), as well as several strategic thematic studies on Financial Digitalisation, sustainable finance, corporate debt, household debt, and Local Currency Transaction (LCT).

At the meeting, the minister also conveyed the robust growth of ASEAN+3 economies of 3.2% in 2022, despite the lingering effects of the COVID-19 pandemic and the Russia-Ukraine conflict.

The region is expected to grow by 4.6% in 2023, led by robust domestic demand as the economic recovery continues to gain traction.

Governor of Bank Indonesia, Perry Warjiyo, highlighted that current challenges and heavy reliance on certain dominant currency for international trade and investment settlement could raise vulnerability and increase the risk of financial stability in ASEAN+3. Therefore, ASEAN+3 needs to be innovative to be able to preserve stability, amidst remained high inflation, tighter liquidity conditions narrower policy room, and strong dollar environment. Under this circumstances, Governor Perry emphasised the importance of strengthening and enhancing the cooperation among ASEAN+3 countries on payment connectivity by promoting more extensive use of local currency for transactions.

Source: Lao News Agency